In preparation for the distribution of approximately $9 billion of Bitcoin to creditors, analysts from JPMorgan and CoinShares expect a significant impact on BTC. Mt. Gox was once the largest Bitcoin exchange before its collapse in 2014. Now, the exchange is ready to return about 141,000 BTC to users who lost funds during its collapse.
The upcoming payment by Mt. Gox accounts for about 0.7% of the total 19.7 million Bitcoins currently in circulation, which is a significant holding. Therefore, the Head of Research at CoinShares, James Butterfill, expressed concern over the potential market impact of this massive return of Bitcoin. He emphasized that this return of Bitcoin reserves has long been a concern for BTC bullies.
Furthermore, it shows market sensitivity to news related to such events. Butterfill stated, "With the announcement that the Trust will start selling in July, investors are right to worry,".
John Glover, Ledn's Chief Investment Officer (CIO), echoed this sentiment. He anticipates a scenario where many creditors may choose to sell their Bitcoins for a profit.
Additionally, his observations highlight the dramatic rise in Bitcoin prices since the closure of Mt. Gox. The price of BTC has soared from around $600 in 2014 to over $63,200 today. Previously, Bitcoin even reached a high of $73,800 in March 2024, due to the launch of Spot BTC ETFs in January.
Furthermore, JPMorgan analysts have also considered the potential impact from creditors Mt. Gox that liquidated their bitcoin holdings. They expect that this massive selloff could put pressure on bitcoin prices in the short term. In a recent research note, JPMorgan analysts stated, “Assuming most liquidity by creditors of Mt. Gox happened in July, this creates a trajectory where crypto prices will come under further pressure in July.”
The JPMorgan analyst also expects that some creditors will choose to sell their Bitcoin holdings to take advantage of the crypto's rising price. Furthermore, worrying sales trends have been observed for the German and US governments. Today, the German government sold another 400 BTC to Coinbase, Kraken, and Bitstamp.